Managing the product innovations paradox: the individual and synergistic role of the firm inside-out and outside-in marketing capability

Purpose: Building upon the firm market orientation theories, this study aims to examine the individual and synergistic effects of the firm inside-out and outside-in marketing capability on its incremental and radical product innovation outcomes. Design/methodology/approach: By collecting cross-sectional data from 203 manufacturing firms in Pakistan, confirmatory factor analysis in AMOS and hierarchical multiple regression analysis in SPSS are performed to validate the study measurement models and test the hypothesized relationships, respectively. Findings: The findings of this study suggest both inside-out and outside-in marketing capability critical for incremental and radical product innovation. Specifically, inside-out marketing capability is found positively associated with incremental product innovation and non-linearly (inverted U-shaped) associated with radical product innovation. Conversely, outside-in marketing capability is found positively associated with radical product innovation but non-linearly (inverted U-shaped) associated with incremental product innovation. However, the results indorse that developing synergy between the inside-out and outside-in marketing capability positively impacts both incremental and radical product innovation. Originality/value: Drawing from the firm inside-out and outside-in market orientation theories, the study extends the existing research on product innovation outcomes from the marketing capabilities perspective. Previous literature highly recognized the value of the firm market orientation and being market-driven in market-based product innovations. However, there was a lack of understanding of how the firm marketing capabilities facilitate incremental and radical product innovation. This study provides a novel understanding of the firm inside-out and outside-in marketing capability role in inducing incremental and radical product innovation which enrich and extend the current literature on firm capabilities and product innovations from a marketing perspective.